Mabuza is flying high

2015-03-15 15:00

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A meeting at SAB was the beginning of a relationship that culminated in Telkom chairperson Jabu Mabuza sealing a deal with privately held investment company Sphere Holdings.

Now the company plans to raise capital of up to R1?billion to fund the next stage of its development.While serving as an executive at hotel group Tsogo Sun, which SAB part-owned at the time, Mabuza met Sphere co-founder Itumeleng Kgaboesele.Kgaboesele, an investment banker with a career spanning Deutsche Bank, Merrill Lynch and Citigroup, was acting as an adviser to the brewer.

“I came to know Itu even before we met on the Telkom board,” Mabuza told City Press.Kgaboesele had been on the telecommunications giant’s board a year longer than Mabuza, who joined as chairperson in 2012.Now Mabuza has cemented the relationship by buying a 10% stake in Sphere, an investment company with a strong private equity background.

He won’t disclose the value of the deal, except to say he paid “fair value”.“I’ve thrown my few cents behind them,” he said, referring to Sphere’s heavyweight team that has a combined 46 years of experience in the intricacies of putting deals together.“For me, it was a question of ‘who do I look up to’,” he added. “I came to this office. They’re in the space of doing something I like.”

The companies in Sphere’s investment portfolio, according to Kgaboesele, tend to have the same customer base.There is the 25%-owned Babcock, an engineering and industrial plant-maintenance company that counts the maintenance of Eskom boilers among its contracts.

Then there are Honeywell and Greif, also in the industrial sector, in which Sphere owns 25% and 10%, respectively.The investee companies are “involved in the business of keeping South Africa going”, according to Kgaboesele.Mabuza found Sphere to be the right fit for him.

Another draw card was the company’s private equity background.“Not many black companies can build the kind of balance sheet they have,” he explained. “When you think of black people, they are in financial services and mining. Rarely private equity.”

He also praised Sphere’s executive team, which has strong corporate capabilities – doing work that is not “easy zama”.He joined Sphere as executive chairperson, effective March 1. It was Mabuza’s first full-time job since he retired from Tsogo Sun four years ago.

In addition to his responsibilities at Telkom, Mabuza retains presidency of business lobby group Business Unity SA and continues to chair the Casino Association of SA.Mabuza said opportunities were boundless – government’s national development plan addressed infrastructure, and Sphere’s investee companies played in that area.Mabuza also wanted to see Sphere get involved in the operations of investee companies in which it had significant minority stakes.

“The things we’re going to go into – we must do them very well and show we’re in them for the long haul,” he concluded.

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